Interesting (long) article about the industry

[Ivo]

I'm finding this article an interesting read. It should appeal to some of you that might like to read about games rather than playing them once in a while

http://boards.revolutionreport.net/inde ... topic=4911

By all means don't consider the views there gospel, but there's definitively food for thought if not anything else in there.

Ivo.

[Saraph]

I read it and thought it was very informative.

Key notes for me:

The Single Day Example

The Video Game Industry overflows with hype. When the game, Halo 2, was released, Microsoft would later boldly call it, “the highest grossing day in entertainment history”. Halo 2 sold 2.4 million in its first day, raking in $125 million to out-gross the film Spider-Man 2 on its opening day.

This makes for a nice headline and PR release, but how revealing is it of the overall sales and profit generated? Not too much. Over its life-span, Halo 2 sold around 7 million (bundled and non-bundled). This is certainly very good sales for a single game. However, Halo 2 is not one of the best selling titles ever as it didn’t even make the top 25 non-bundled games (this is counting Halo 2 both bundled and non-bundled).

Super Mario Land (Gameboy - 18.06 million)
Super Mario Bros. 3 (NES - 17.28 million)
Grand Theft Auto: San Andreas (PS2 - 12 million)
Grand Theft Auto: Vice City (PS2 - 12 million)
Super Mario 64 (N64 - 11.62 million)
Super Mario Land 2 (Gameboy - 11.09 million)
Gran Turismo 3: A-Spec (PS2 - 11 million)
Super Mario All-Stars (SNES - 10.5 million) [15]
Gran Turismo (PS1 - 10.5 million)
Grand Theft Auto III (PS2 - 10 million)
Mario Kart 64 (N64 - 9.87 million) [16]
Final Fantasy VII (PS1 - 9.8 million)
Donkey Kong Country (SNES - 9.3 million)
Gran Turismo 2 (PS1 - 8.5 million)
Super Mario Kart (SNES - 8 million)
GoldenEye 007 (N64 - 8 million)
Gran Turismo 4 (PS2 - 8 million)
Final Fantasy VIII (PS2 - 8 million)
Pokémon Yellow (Gameboy - 7.76 million)
Pokémon Blue (Gameboy - 7.68 million)
The Legend of Zelda: Ocarina of Time (N64 - 7.6 million)
Pokémon Red (Gameboy - 7.49 million)
Super Mario Bros. 2 (NES - 7.46 million)
Pokémon Silver (Gameboy - 7.36 million)
Pokémon Gold (7.15 million)

This ‘single day scenario’ only cherry-picks what information the company wants to share. We need all the information, not ‘snapshots’.

Ignoring the Entire User Base Example

‘Xbox Live is a tremendous success’, headlines and Microsoft tells us. Is it actually generating profit? This is not told. Rather, we are told how much money people spent with Xbox Live. Does this tell us how many people are playing on it? No. The revealing of internal Microsoft documents did eventually tell us how many people are subscribed to Xbox Live: 2 million. This is out of 22 million Xbox users. While simply announcing 2 million users may seem like a lot, it is actually very small. A single game like World of Warcraft has five million subscribers. The success of the online service is not how many people use it but the percentage that have the console in the first place. The percentage of Xbox 1 owners who subscribe to Xbox Live is 10%. This is not just ‘bad’; it is a failure rate. But by selectively choosing which information to release, Microsoft was able to convince the press and the world that Xbox Live was a tremendous success despite its extremely low user base.

Myth: Xbox was number two in market share this generation.

While it appears clear that the Playstation 2 outsold the other systems, the numbers for the Xbox are quite interesting. Microsoft is not telling us how many units it has. The most recent data comes from the February 2005 Annual Report to shareholders and partners. I do not believe this documentation was meant for general public. However, it says,

This is shipments, people. Not sales. How many of those Xboxes were ‘shipped’ as replacements for defective Xboxes? How many of those Xboxes are sitting in stores? How many of those Xboxes are being ignored in Japan?

Nintendo has said the total number of Gamecube systems sold, as of September 2005, was 19.5 million. Perhaps Nintendo should start giving us the number of consoles it ships instead of sold since no other console company seems interested in giving us the sales numbers.

The number of Xbox 1s and Gamecube systems sold is close, very close. However, when the Xbox 360 was launched right before Christmas, Xbox 1 sales plummeted. NPD’s numbers have it at a drop of 75%. While it may or may not have been that steep, there certainly was a drastic decline in Xbox 1 sales. Sadly, this plummet occurred to the Xbox 1 right before the 2005 Christmas (whereas the Gamecube had its Christmas sales). In 2006, Xbox 1 sales will eventually fade into oblivion as Xbox 360s become more plentiful. Considering that the Revolution will not be launched until probably November, the Gamecube has practically a year of (modest) sales (before its successor comes out and Gamecube goes to console heaven) unlike Xbox 1. Keep in mind that a killer app (Zelda: Twilight Princess) is set to be released for the Gamecube as well.

Even worse, Reggie, in a January 2006 interview, disagreed with a reporter about the Gamecube being in third place in worldwide marketshare. Nintendo may have numbers that it has not announced yet. If the Gamecube has not outsold the Xbox 1 yet, it is set to do so within early 2006.

[Zed]

Quite interesting, Ivo. Thanks for the link.

[lordofduct]

That was a great read... and surprisingly opened my eyes to WHY I'm not really much of a gamer anymore and don't invest my money in it. It's left to nostalgia and I don't need to spend money to get my nostalgia; it's all sitting in my living room right now waiting for me and I hardly even touch it.

Also being the reason I want to build that MAME arcade machine... consolidate that behemouth mess of a living room into one simple machine I can put out in my game room along with a pool table and bar for fun party nights.